This was inspired by an awesome blog by Beth Incorvati about an issue she had at a closing table in which an agent confronted her about the co-op she had agreed to when she saw that Beth's was higher on the closing statement.
As a buyer's agent it is my responsibility and duty to make as much money as possible. Heck, I'm going to be driving all around God's Green Earth after I spend hour upon hour of searching out, e-mailing and discussing homes with you. This could, literally, go on for weeks or months. Any home you're interested in you may want a second or even third showing on! I might have to call a listing broker's office and get disclosures faxed over. Then, after I've done all that...I'll have to fill out and explain a contract to you- that could take over an hour! And my job isn't even done there, I need to help you coordinate and attend a home inspection (because I'm sure you're the type of guy who just has to know if there's anything wrong with the house beforehe pays for it). Beyond that we'll need to check on lending and do a final walk-through...grrrr
I'm going to do all that and my brokerage is only going to be paid 2- 2.5% of the sales price!?!?! Ahhhhhhhh!
Yeah- that's right! Because YOU WORK FOR THE BUYER...YOUR CLIENT, NOT THE PAYCHECK!!!!
There is no such thing as a normal or standard commission rate to charge a seller. Thus, there is no normal or standard co-op payment to a buyer's agent. There may be a co-op that you're used to seeing because it's a more prevalent number on listings you show but all commissions are negotiable!For terms of discussion, what some perceive as a normal or standard commission- I'll refer to as commonly known commission- for lack of a better definition.
When I started in the business, I cut my teeth with one of the nationally known brokerages. An even better-known national brokerage opened up just before I was licensed and was listing homes for 4% when the local 'commonly known commission' was 5-6%. Of course, this meant commission co-ops to buyers agents dropped from 2.5 to 3% down to 2% on most of their listings.
I had agents say to me, "I'm not showing this house- look here" [points to co-op]. I watched agents print out listing sheets for their clients and look over the co-op and
throw them in the garbage if they weren't high enough.
"That is insane," I thought.....and still do!
As a buyer's agent it is my primary duty to look out for the buyer! Find him/her/them a great house that meets their needs and that they love....If I start looking at and worrying about how much my commission check is going to be before I show houses or write contracts, I've already put my needs and wants above that of my client! I've always been frightened by those who are willing to throw away listing sheets because the commission isn't high enough. I find it highly unethical and a real black-eye for the profession.
Here's an idea to try for 'those' agents: Have your buyer sign an exclusive agreement with your commission in it. Make your buyer aware that only work for x% commission and if the MLS co-op is lower than that that he/she/they will be required to 'fill in the void'. That way, you don't have to act unethically and will better serve your clients.